Manufacturing cannot rescue us from the City's recession(UK)

[CHIMO]

A recession made in the City was to be followed by a recovery made in Britain's industrial heartlands. That has been the refrain by politicians of all hues as they tried to chart a way out of the mess created by the meltdown of 2007-08. Lord Mandelson talked of the need for less financial engineering and more real engineering. George Osborne brought his budget speech to an end this year with a peroration about the "march of the makers".

So far it has proved to be more of a funeral march. The burst of activity in UK factories proved to be short-lived and petered out once manufacturers had replenished the stocks run down in 2009 when both domestic and global demand collapsed.

Ouptut fell in the second quarter and, judging by business surveys, shows no real prospect of picking up in the second half of the year. While the City has bounced back quickly from the recession, industry is producing 8% less than it was four years ago. Similarly, employment prospects are less gloomy in the southern half of England than they are in the rest of Britain.

Over the years, the country has gradually slipped down the international league table of manufacturing. The first country to industrialise, by 1900 Britain had been overtaken by the US, and by the outbreak of the first world war had slipped behind Germany as well. Factories in Britain continued to produce more; it was simply that other countries were increasing their output more rapidly.

http://www.guardian.co.uk/business/2011/aug/15/manufacturing-recession-trade-deficit